 Forward Looking Statement
EXHIBIT 99
3
adverse changes in energy industry law, policies and regulation,
including market structures and a potential shift away from
competitive markets toward subsidized market mechanisms,
transmission planning and cost allocation rules, including
rules regarding how transmission is planned and who is permitted
to build transmission in the future, and reliability
standards, changes in federal and state environmental regulations that could
increase our costs or limit our operations,
any equipment failures, accidents, severe weather events or other
incidents that impact our ability to provide safe and
reliable service to our customers, and any inability to
sufficiently obtain coverage or recover proceeds of insurance on such
matters,
any inability to realize anticipated tax benefits or retain tax
credits,
challenges associated with recruitment and/or retention of a qualified
workforce,
changes in technology and customer usage patterns.
The forward-looking statements contained in this communication are
intended to qualify for the safe harbor provisions of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.
All of the forward-looking statements made in this communication are
qualified by these cautionary statements and we cannot assure you that
the results or developments anticipated by management will be realized
or even if realized, will have the expected consequences to, or effects
on, us or our business prospects, financial condition or results of
operations. Readers are cautioned not to place undue reliance on these
forward-looking statements in making any investment decision.
Forward-looking statements made in this communication apply only as of
the date of this communication. While we may elect to update
forward-looking statements from time to time, we specifically
disclaim any obligation to do so, even if internal estimates change,
unless otherwise required by applicable securities laws.
any inability to balance our energy obligations, available supply
and risks,
actions or activities at one of our nuclear units located on a multi-unit
site that might adversely affect our ability to continue to operate that
unit or other units located at the same site,
•
changes in nuclear regulation and/or general developments in the nuclear power
industry, including various impacts from any accidents or incidents
experienced at our facilities or by others in the industry, that could
limit operations of our nuclear generating units,
•
•
•
•
•
any inability of our transmission and distribution businesses to obtain
adequate and timely rate relief and regulatory approvals from federal
and state regulators, availability of capital and credit at commercially reasonable terms and
conditions and our ability to meet cash needs,
•
•
•
•
•
•
increases in competition in energy supply markets as well as competition for
certain rate-based transmission projects,
•
•
any inability to achieve, or continue to sustain, our expected levels of
operating performance,
changes in the cost of, or interruption in the supply of, fuel and other
commodities necessary to the operation of our generating units,
delays in receipt of necessary permits and approvals for our construction and
development activities,
•
•
any deterioration in our credit quality or the credit quality of our
counterparties, including in our leveraged leases,
•
•
•
adverse performance of our decommissioning and defined benefit plan trust fund
investments and changes in funding requirements, and
Certain of the matters discussed in this communication about us and our
subsidiaries future performance, including, without limitation, future
revenues, earnings, strategies, prospects, consequences and all other
statements that are not purely historical constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks and uncertainties, which could cause
actual results to differ materially from those anticipated. Such
statements are based on management’s beliefs as well as assumptions made by
and information currently available to management. When used herein, the words
“anticipate,” “intend,” “estimate,”
“believe,” “expect,” “plan,” “should,” “hypothetical,”
“potential,” “forecast,” “project,” variations of
such words and similar expressions are intended to identify
forward-looking statements. Factors that may cause actual results to
differ are often presented with the forward-looking statements themselves.
Other factors that could cause actual results to differ materially from
those contemplated in any forward- looking statements made by us
herein are discussed in filings we make with the United States
Securities and Exchange Commission (SEC), including our Annual Report on Form
10-K and subsequent reports on Form 10-Q an d Form 8-K and
available on our website: http://www.pseg.com. These factors include,
but are not limited to: adverse changes in the demand for or the price of the capacity and energy that
we sell into wholesale electricity markets,
delays or unforeseen cost escalations in our construction and development
activities,
|
 GAAP Disclaimer
PSEG presents Operating Earnings in addition to its Income from Continuing
Operations/Net Income reported in accordance with accounting principles
generally accepted in the United States (GAAP). Operating Earnings
is a non- GAAP financial measure that differs from Net Income because
it excludes gains or losses associated with Nuclear Decommissioning
Trust (NDT), Mark-to-Market (MTM) accounting, and other material
one-time items. PSEG presents Operating Earnings because
management believes that it is appropriate for investors to consider
results excluding these items in addition to the results reported in
accordance with GAAP. PSEG believes that the non-GAAP financial
measure of Operating Earnings provides a consistent and comparable
measure of performance of its businesses to help shareholders understand
performance trends. This information is not
intended to be viewed as an alternative to GAAP
information. Slides A and B at the end of this presentation include a list of
items excluded from Income from Continuing Operations/Net Income to
reconcile to Operating Earnings, with a reference to that slide included
on each of the slides where the non-GAAP information appears.
4 |
 70 local NJ towns and 6 counties
support
•
70 municipalities and six counties (Bergen, Hudson, Mercer,
Passaic, Somerset and Union) have approved resolutions in
support of Energy Strong, PSE&G’s infrastructure proposal to
improve and fortify its electric and gas distribution systems
•
The Energy Strong proposal is currently being evaluated by the
NJ Board of Public Utilities
•
Public hearings are scheduled for September and October 2013
13 |
 PSEG First Half 2013 -
Highlights
Maintaining 2013 operating earnings guidance of $2.25 -
$2.50 per share
Strong earnings: First half 2013 earnings of $1.33 per share vs. $1.28
in year-ago period Capital investment on schedule
Financial position remains strong
Full year 2013 operating earnings expected to be at the upper end of
guidance, assuming normal weather and unit operations
17
Power benefitting from higher capacity prices and asset location
PSE&G seeing results from increased investment in transmission
O&M under control {Continuing control of O&M supporting
results} S&P credit rating upgrade across Enterprise, Power and
PSE&G Debt represented 41% of capital at June 30, 2013
Dividend
increased
1.4%
to
$1.44
per
share,
the
9
th
increase
in
the
last
ten
years
PSE&G received approval to invest $446 million in extensions of Solar 4
All and Solar Loan programs PSE&G’s existing $3.4 billion
Transmission investment program remains on schedule Hearings scheduled
for Energy Strong, PSE&G’s $2.6 billion, 5-year capital infrastructure program |
 2013 Operating Earnings
*
Investment in the
regulated business
has changed the
earnings mix
Our 2009-2013
investment focus has
brought us to a 50/50
mix for 2013
PSE&G’s 2013-2017
Energy Strong Program
and ongoing transmission
investments will support
continued growth in
PSE&G’s earnings
Percent of Operating Earnings Contribution by Subsidiary
PSE&G
Power
Other
$2.74
$2.44
$2.25
-
$2.50E
$3.09
$3.12
18
20%
27%
38%
43%
50%
76%
69%
61%
52%
47%
2009
2010
2011
2012
2013E
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING
OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS; ALL
PERIODS REFLECT TEXAS IN DISCONTINUED OPERATIONS.
E=ESTIMATE. |
 PSE&G’s 2013 operating earnings
benefiting from transmission growth and cost containment
initiatives
E=ESTIMATE
45
$528
2012
2013 Guidance
PSE&G Operating Earnings*
($ Millions)
$580 -
$635E
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING
OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.
|
 LIPA T&D management contract
In December 2011, the Long Island Power Authority (LIPA) selected PSEG to
manage its electric transmission and distribution system for 10 years
starting in January 2014 •
Reasons for selecting PSEG included:
•
Transition
activities
on-track –
successfully
achieving
all
milestones
•
Successful management of the LIPA transmission and distribution system may
lead to additional growth opportunities
47
LIPA / National Grid Contract
Thru Dec 2013
PSEG Transition Period
2012-2013
PSEG Long Island
Operating Period
2014 -
2023
Proven
technical
capabilities
and
track
record
of
top
quartile
customer
service
and
reliability
Commitment to cost control and investment optimization
Corporate culture of transparency and data-driven decision making
Evaluating
impact
of
Superstorm
Sandy
and
recent
LIPA
management
changes
on
the
overall schedule and transition |
 Maintaining 2013 operating earnings guidance
PSEG Operating Earnings
$ Millions (except EPS)
2013E
PSEG Power
$535
-
$600
PSE&G
$580 -
$635
PSEG Energy Holdings/Parent
$25 -
$35
Operating Earnings*
$1,140 -
$1,270
E=ESTIMATE
Based on our performance year-to-date, we expect full year
operating earnings to be at the upper end of guidance,
assuming normal weather and unit operations
87
2013 Earnings Guidance
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING
OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.
$2.25 - $2.50
|
 PSEG Summary
•
Maintaining
2013
operating
earnings
guidance
of
$2.25
-
$2.50
per
share
--
based on financial results to date, we expect operating
earnings for the full year to be at the upper end of our guidance range
assuming normal weather and unit operations
•
Double digit operating earnings growth at PSE&G starting in 2013,
and continuing through 2015 driven by transmission investments
and approved programs
•
Power’s continued focus on operational excellence, market expertise
and financial strength reduces risk in low price environment
•
Strong Balance Sheet and Cash Flow support full capital program
without the need for equity
•
Long history of returning cash to the shareholder through the
common dividend, with opportunity for future growth
100 |
 Items Excluded from Income from Continuing
Operations/Net Income to Reconcile to Operating Earnings
A
2012
2011
2010
2009
2008
Earnings
Impact
($
Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
52
$
50
$
46
$
9
$
(71)
$
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)
(10)
107
(1)
(11)
14
Lease Transaction Activity (Energy Holdings)
36
(173)
-
29
(490)
Storm O&M (PSEG Power)
(39)
-
-
-
-
Market Transition Charge Refund (PSE&G)
-
-
(72)
-
-
Gain (Loss) on Asset Sales and Impairments (Energy Holdings)
-
34
-
-
(13)
Total Pro-forma adjustments
39
$
18
$
(27)
$
27
$
(560)
$
Fully Diluted Average Shares Outstanding (in Millions)
507
507
507
507
508
Per
Share
Impact
(Diluted)
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.10
$
0.10
$
0.09
$
0.02
$
(0.14)
$
Gain (Loss) on MTM (PSEG Power)
(0.02)
0.21
-
(0.02)
0.03
Lease Transaction Activity (Energy Holdings)
0.07
(0.34)
-
0.05
(0.96)
Storm O&M (PSEG Power)
(0.08)
-
-
-
-
Market Transition Charge Refund (PSE&G)
-
-
(0.14)
-
-
Gain (Loss) on Asset Sales and Impairments (Energy Holdings)
-
0.06
-
-
(0.03)
Total Pro-forma adjustments
0.07
$
0.03
$
(0.05)
$
0.05
$
(1.10)
$
For the Year Ended
December 31,
(Unaudited)
Pro-forma Adjustments, net of tax
PLEASE SEE PAGE 4 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS
AS A NON-GAAP FINANCIAL MEASURE AND HOW IT DIFFERS FROM INCOME FROM
CONTINUING OPERATIONS/NET INCOME.
|
 Items Excluded from Income from Continuing
Operations/Net Income to Reconcile to Operating Earnings
B
2013
2012
2013
2012
Earnings
Impact
($
Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
8
$
4
$
17
$
9
$
(a)
(PSEG Power)
80
(10)
(25)
42
Lease Related Activity (PSEG Energy Holdings)
-
2
-
6
Storm O&M, (PSEG Power)
2
-
(15)
-
Total Pro-forma adjustments
90
$
(4)
$
(23)
$
57
$
Fully Diluted Average Shares Outstanding (in Millions)
507
507
507
507
Per
Share
Impact
(Diluted)
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.02
$
0.01
$
0.04
$
0.02
$
Gain (Loss) on MTM
(a)
(PSEG Power)
0.16
(0.02)
(0.05)
0.08
Lease Related Activity (PSEG Energy Holdings)
-
-
-
0.01
Storm O&M, (PSEG Power)
-
-
(0.03)
-
Total Pro-forma adjustments
0.18
$
(0.01)
$
(0.04)
$
0.11
$
(a) Includes the financial impact from positions with forward delivery
months. Three Months Ended
Six Months Ended
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling Items Excluded from Income from Continuing Operations/Net Income to
Compute Operating Earnings (Unaudited)
June 30,
June 30,
Pro-forma Adjustments, net of tax
Gain
(Loss)
on
Mark-to-Market
(MTM)
PLEASE SEE PAGE 4 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS
AS A NON-GAAP FINANCIAL MEASURE AND HOW IT DIFFERS FROM INCOME FROM
CONTINUING OPERATIONS/NET INCOME.
|